Broader earnings outcome of blue chip companies such as Infosys on Friday and Tata Consultancy Services on Monday will set the tone in the coming weeks. Analysts will watch management commentary for direction on the technology sector.

"Third-quarter earnings would be a key focus in the near term, but I don't expect earnings to give material positives," said Vijay Kedia, director at private wealth management firm Kedia Securities.

The impact of government policies would be felt only after a few months, Kedia added.

The BSE Sensex rose 0.26 percent, or 51.10 points, to end at 19,742.52.

The investment bank said the upgrades came on the back of a steepening bond yield curve in anticipation of rate cuts by India's central bank, stronger-than-expected loan recoveries, and reduced quality pressures.

Among decliners, shares of Larsen & Toubro Ltd (LART.NS) fell 1.3 percent after Citigroup and Barclays downgraded the engineering conglomerate on concerns over order cancellations and weak investment cycle.

Citi downgraded L&T to 'neutral' from 'buy' and cut its target price to 1,732 rupees from 1,855 rupees, citing cancellations in the second quarter of fiscal 2013, slow-moving orders, as well as a weaker domestic economic growth.